VMware's Famous Engineer Is Now A VC And He's Looking To Fund Two Kinds Of Startups

A year and a half ago, an engineer who helped build VMware into a
$5.2 billion company with 14,000 employees left to become a VC.

That engineer, Steve Herrod, joined General
Catalyst. At the time, his
departure was considered a big loss for his former company where
he was CTO. At
VMware, he helped win a bidding war and purchased
a
tiny startup named
Nicira for a $1.26
billion.

Buying Nicira put VMware
on a collision coursewith
one of its former partners, Cisco; rumor had it that Cisco was
also bidding on Nicira. Buying the startup was a bold move by
Herrod and VMware all the way around.

Herrod was one of the first 60 VMware employees and he
worked there for 11 years. Business Insider interviewed him about
his work at VMware and his new career as a VC. He says he looks
for two types of startups to invest in.

Here's the lightly edited Q&A.

Business Insider: In its 16 year history, VMware has had
rocky times. There were a few years when it looked like Microsoft
would crush it. Why do you think VMware ultimately
survived?

Steve
Herrod: To [VMware co-founder] Mendel
Rosenblum's credit, he came up with mission statement
from the first day that said, 'We aim to be software that's
running every data center everywhere.' It was kind of ridiculous
to say that that early on. But unlike a lot of startups who like
to talk about "pivots,"
it was actually a pretty straightforward goal.

So we decided from Day 1 that
our biggest advocates would be developers. We would make an
awesome workstation product that would let them test their
software in different ways and let them have fewer machines under
their desk. Software developers used to have to have a Windows
box [computer] and a Linux box [under their desks].

We thought, "If we make the
developers love us, they'll tell their managers and they'll tell
the CIO and we'll ultimately be in the data center." And it
really panned out.

BI: What technologies
excite you today?

In the consumer world, everyone
talks about social local mobile (SoLoMo). The enterprise
equivalent is big data, mobile, cloud. We need an acronym for
that.

BI:
'BigMoCo'?

SH: [Laughs] Let’s assume those make it into core
enterprise. What's next? There are two areas I'm most excited
about. We're in the early beginnings of enterprises writing
mobile apps ... just like they write their own Web
apps.

That creates opportunities for writing apps and test/development
for enterprises for what I call "mobile-first infrastructure."

And just like developers tied web apps into the database, they'll
want their mobile apps to talk to the same data, so they'll
need formal connections called
APIs. Apigee, Mashery
and Runscope are
examples of very developer-friendly companies for writing apps
and testing APIs. [Herrod was part of a
$6 million series A in Runscope, $7.1 million raised in
total]

BI: So, you're still
trying to make developers happy. What's the second startup
investment area you're interested in?

SH: Security.
You need new approaches to security that wrap up an app and
protect it wherever it happens to reside, as opposed to
protecting it in a physical place [like a corporate data
center]. Illumio, I invested in, is an example.
[Illumio is a security company still in stealth founded by
folks from VMware, Cisco, Juniper and
Nicira.]

BI: Any technologies
you wish people would stop pitching to you?

SH: I don’t
need to see any more "software-defined storage." Keywords I see
all the time: "flash-based, distributed, x86 storage, with
VM-awareness."

"Flash storage" is very well
funded these days and it's not something I would invest
in.